Ripple effect? Stellar (XLM) is catching up to XRP price gains
XLM has turned most overbought since April 2021, boosting risks of a 30% price decline by September.
Stellar (XLM) is basking in the glow of Ripple's partial win against the U.S. Securities and Exchange Commission (SEC), up around 60% since the court ruling on July 13.
XRP fuels XLM price rally again
XLM price has risen over 60% since July 13, when a federal judge ruled that the XRP sales on public exchanges did not break U.S. securities laws. Still, the token is down about 20% from its local peak of $0.195 and was changing hands for about $0.154 on July 23.
The period of XLM's price rise has appeared alongside the token's growing positive correlation with XRP on the daily timeframe. As of July 23, the correlation coefficient between the two assets was 0.95, suggesting they are moving in a near-perfect tandem.
The price trends in XLM and XRP markets typically mirror one another, given Stellar is a breakaway blockchain payment project founded by Ripple's co-founder Jed McCaleb. For instance, XRP's price has also surged around 60% since the Ripple win.
But XRP price risks dropping approximately 40% by September, which will likely put XLM under similar bearish stress.
XLM most overbought since April 2021
From a technical perspective, the latest XLM price rally has pushed the market's weekly relative strength index (RSI) to its most overbought levels since April 2021.
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